Mike,
I'm inclined to agree with Choo-Choo Mike, re batteries. But utilizing a different arrangement.
Check out this kit from Evans Design... (Forum sponsor, BTW)
I've used an earlier version of this kit on a couple of Ambroid caboose kits in O scale. I substituted the pre-wired Tomar LED marker lights for the Evans LED's. Here's a couple related photos...
The Evans kit comes with a battery (2032 'coin'-type), holder, push button on/off switch. The battery/holder is visible in the top photo, the push button switch just to its left. The button has an extension I added to reach through the floor (you can see the black tip just below the floor at the switch). Per communication with Evans, I could've added an additional LED to this set-up as a desk light (I was contemplating a simple single window vignette) without overly taxing the 3volt battery.
I also have an LGB 4075 Drover's Caboose, as in your photo. It was to be part of our outdoor garden railway...which is a fast-fading project at our age! It's never been on the rails, still has original plastic wheels. But, I measured the opening in the base of the marker lights. As per the LED choices Evans offers in this kit, the LGB markers should easily take a 3mm chip LED...plenty of light for those markers, IMHO. (The Tomar markers in the photo use nano LEDs)
Since the baggage compartment doors are operable on this model, you could very easily mount the switch and the battery holder accessible behind one of the doors. And...best of all?...you just eliminated the need to dink with power pickups from the wheels!!
BTW...as Choo-Choo Mike mentioned with his experience, my two O scale cabeese () still have the original batteries. Of course, admittedly they have not had much run time of late. They're both on a display track. But I just checked them while retrieving the LGB car and they both brightly light. Besides, if you haven't noticed at the battery kiosks in the big box stores (HD, Lowes, Menards, etc.), 2032 batteries are relatively cheap...and plentiful!
Suit yourself. I'm a believer in the K.I.S.S. approach, which is why I'd take the batt-powered approach.
In fact, now that I have the LGB caboose in my lap as I write this, I believe I'll do just that!! If nothing else, it should be a 'perk' when I finally part with it!
FWIW, of course.
KD